A jump in factory fires is dangerous for the people who work there - and the supply chain

The unraveling of the global supply chain has been blamed on a multitude of factors — the pandemic, labor and raw material shortages, skyrocketing shipping prices and adverse weather events among them. Now, add one more to the list: a surge in factory fires.

Supply chain disruptions last year jumped 88% over the year prior, according to a report from Resilinc, a leading global supply chain monitoring and risk management firm. The top six causes of the disruptions, the report found, were factory fires, mergers and acquisitions, business sales, production disruptions, leadership transitions and supply shortages.

Resilinc said it recorded the most factory fires in a single year in 2021 since it began tracking fire events a decade ago. The firm issued 1,946 verified factory fire alerts — a 129% increase over 2020 — to its clients, which include such giants as IBM (IBM) and GM (GM).

The jump in factory fires resulted from gaps in regulatory and production oversight, as well as a shortage of skilled labor in warehouses, said Bindiya Vakil, a supply chain risk management expert and CEO of Resilinc.

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“In a year in which the global supply chain already has several triggers of disruptions, the high occurrence of fires in factories exacerbated the overall situation,” Vakil said. “A fire at one supplier can affect many industries.”

Firefighters try to control the fire that gutted a plastic factory in Mayapuri on September 16, 2021 in New Delhi, India.

The pandemic, Vakil said, was likely a major contributor to less than optimal levels of vigilance. “With fewer workers on site and hours cut back, coupled with some functions going remote, things like preventive maintenance and proper clean up between shift changes were impacted,” she said. “This can be especially dangerous in factories that have hazardous and flammable materials.”

Among the countries that saw the highest number of factory fire alerts last year were the United States (425), India (159), Germany (122), South Korea (117), Mexico (97), the United Kingdom (78) and Japan (72), Resilinc reported.

GERMANY, BONN - OCTOBER 08: In this photo illustration, A technician holds a central processor microchip known as a semiconductor over a circuit board at Bonn Proton Ltd on October 08, 2021 in Bonn, Germany. The global chip shortage continues among Carmakers, tech manufactures including giants Apple Inc. and Samsung Electronics Co with companies suffering production cuts and lost revenue from the crisis. (Photo illustration by Ulrich Baumgarten via Getty Images)

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The industries most affected by the fires were automotive manufacturing, food and beverage, aerospace, life sciences and home furnishings, the report said.

Vakil said she fears other disruptions could continue to roil the global supply chain in 2022. “Things could get worse with the brewing Russia-Ukraine conflict,” the CEO said. “Russia is a key global supplier of several commodities and raw materials.”